Starting a new company is an exciting venture filled with opportunities, but it also comes with a set of challenges and considerations.
Whether you’re an aspiring entrepreneur or a seasoned business professional looking to expand, this article aims to provide valuable insights and guidance for those planning to start a new company in the UK.
From legal obligations to strategic decisions, we’ll explore essential factors that can help you navigate the path to success.
Let’s go one by one, so it’s clear for you.
1. First, look for Legal Requirements and Registrations:
Before embarking on your entrepreneurial journey, it’s crucial to fulfil certain legal requirements and registrations. Here are some key steps to consider:
a. Start a brand-new company?
If your plan is to start a brand-new company then determining the legal structure of your company is crucial, such as a limited liability company (Ltd) or a partnership. This can often be a tricky decision – as there is no one-size-fits-all answer. However, we generally recommend forming an LTD for its tax efficiency, unless there are significant changes in the political market in the future – who knows! Either way, best to talk to us about this so we can tailor to your particular goals and needs.
b. Buy a ready formed company?
If you are not the best and strongest to start something from scratch or you like convenience, then the option you have will be to buy a ready-formed company. This refers to the purchasing of an existing company that has already been registered and established. Here are two key points to consider when contemplating this route:
– Buying a ready-formed company offers time efficiency and an established legal framework, saving you the effort of starting from scratch.
– An existing company comes with a business history and reputation, providing potential advantages in terms of existing relationships and market presence, so this could be pretty handy especially if you need to look at financing your start up.
2. Next, work on Appointing directors and making agreements with your shareholders
a. Appointing Directors:
Appointing the right individuals as directors is vital for the success of your company. Consider the following guidelines
- Identify individuals who possess the necessary skills, experience, and expertise to
contribute to the success of your company. - Consider their qualifications, industry knowledge, and ability to fulfill legal obligations associated with being a director.
- Follow the proper procedures for appointing directors, which may include board
resolutions, filing necessary forms with Companies House, and updating the company’s registers
b. Shareholder Agreements:
Establishing clear and comprehensive shareholder agreements is crucial for defining the rights, responsibilities, and obligations of shareholders. Follow these steps
- Develop a shareholder agreement to establish the rights, responsibilities, and obligations of the company’s shareholders.
- Address important topics, such as share ownership, decision-making processes, dividend distribution, and dispute resolution mechanisms.
- Seek legal advice to ensure the agreement aligns with the company’s objectives and protects the interests of all shareholders involved.
3. Next, think about Tax compliance (SH specialism!)
a. Should I register for VAT:
Depending on your expected turnover and business activities, you may need to register for VAT (Value Added Tax). Understanding the VAT regulations and determining if your business falls within the threshold for mandatory registration is really important. Current threshold at £85000 for 23/24 but you could also voluntarily register.
Side note; there seems to be a rumor about VAT making you more money because you can ‘claim it all back’ – give us a call to get a better understanding of this!
b. PAYE Obligations
When you employ staff or workers, fulfilling your Pay As You Earn (PAYE) obligations is crucial. Register as an employer with HM Revenue & Customs (HMRC) and operate a PAYE system to deduct income tax and National Insurance contributions from employee wages. Stay updated with PAYE regulations, including tax codes, allowances, and reporting requirements, to ensure accurate compliance. Managing your PAYE obligations correctly helps maintain good relationships with your employees and avoids penalties or legal issues.
Conclusion
Starting a new company is a significant endeavour that requires careful planning, adherence to legal obligations, and a thorough understanding of the intricacies involved. By following the steps outlined in this article, you’ll be better equipped to tackle the challenges that come your way and set your new company on the path to success. Remember, seeking expert assistance and staying informed about the latest regulations will contribute to the smooth operation of your business. Good luck with your entrepreneurial journey!
For more information or to book a free consultation, please feel free to contact us at +44 1234 255941 or drop a message, click here to email us.
We are here to help you every step of the way.
